Spain’s startup ecosystem has reached a significant milestone, with the combined enterprise value (EV) of Spanish startups surpassing €100 billion in 2023, according to a report by Dealroom. This puts Spain ahead of countries like Norway, Italy, and Portugal. While Spain’s venture capital tally was lower last year compared to the previous two years, it still remained above pre-pandemic levels.
The growth of Spain’s tech ecosystem has been impressive, with the value of Spanish tech being one of the fastest-growing in Europe. France reached €100 billion in combined startup EV six years ago, and Germany reached that milestone nine years ago. However, with more time, Spanish startups have the potential to become decacorns and more.
Looking at the investment landscape, the report shows that early-stage investment in Spanish startups was at an all-time high in 2023. Pre-seed, seed, and Series A stages saw significant activity, while Series B and Series C stages remained strong. Late-stage activity, however, experienced a slowdown. This trend is not unique to Spain but is a concern for the overall startup ecosystem.
Late-stage activity is essential for the ecosystem to thrive because successful scaleups often turn into founder factories. Without liquidity events like acquisitions and IPOs, it becomes challenging for former employees to become angel investors or start new companies. Additionally, exits provide liquidity that can be reinvested into early-stage deals, ensuring a continuous flow of capital for startups.
Despite these concerns, Spanish VCs remain optimistic about the future. They believe that many of the companies currently being funded will become scaleups in the next five to ten years. The early-stage activity in Spain’s startup scene remains healthy, which is a positive sign for the future.
Another encouraging aspect of Spain’s startup ecosystem is the focus on sectors that align with Europe’s priorities. Most of the VC funding in 2023 went to climate tech, followed by biotech and clean energy. It is still too early to determine how many of these startups will become centaurs (companies valued at $1 billion or more), but they are worth keeping an eye on.
In conclusion, Spain’s startup ecosystem has achieved significant growth, surpassing €100 billion in combined EV. While there are concerns about late-stage activity and liquidity events, the early-stage activity and focus on sectors aligned with Europe’s priorities bode well for the future. With time and continued support, Spanish startups have the potential to become major players in the global tech landscape.